Business Ch4

Leveraged Buyout (LBO)

When a group of investors borrows money from banks and other institutions to acquire a company and uses the assets of the purchased company to guarantee repayment of the loan

Sole Proprietorship

a business owned and managed by a single individual. They are a popular choice for small businesses due to the low initial costs. Also, any generated income is only taxed once, as opposed to being taxed as a company and then again as a personal source of income. They are also subjected less to taxation and regulation compared to other types of businesses. They lack public reporting. Disadvantage: lack of continuity. Taxation is considered both as an advantage and a disadvantage.

Partnership

a business owned by two or more people. They also share profits. The partnership agreement clearly states the amount of authority, potential profits and liabilities that each partner is due. Disadvantage: They require additional government regulation.

dividend

a distribution of profits by a corporation to its shareholders

articles of partnership

a partnership agreement

limited partnership

a relationship where one or more partners are not involved in the day-to-day management of the business. They're also not liable for the debts of the company. Limited has both limited and general partnerships. At least on partner has unlimited liability.

Strategic alliances

agreements among two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation

proxy

an agent legally authorized to act on behalf of another party.

joint venture

an agreement between two or more companies to share a business project for a limited amount of time

Shareholder

an owner of shares in a company

S corporation

his type of business organization divides income and losses among its shareholders. This means that the corporation itself does not pay any income taxes, making it an effective way of avoiding double taxation. It contains restrictions on shareholders. business ownership that is taxed as though it were a partnership; it is very popular among entrepreneurs and represents almost half of all corporate filings.

Corporation

Corporations are companies that have been authorized to act as single entities. When a company's owner incorporates their business, they essentially separate their personal liability from that of the company. Corporations have many of the rights and responsibilities that individuals enjoy, such as owning assets, hiring employees and paying taxes. However, they are subject to state regulation, with a state-imposed board structure and taxation of both business and personal revenue. it's also the easiest way to raise capital (money) from outside investors. Created by state. They share the business stock.

tax consultant

Tax consultants use their expertise to help clients comply with tax regulations and take advantage of adjustments, deductions, and credits that let them keep more of their money.

Tender Offer

Tender offers are typically made publicly and invite shareholders to sell their shares for a specified price and within a particular window of time. Most tender offers are friendly, both sides agree on a proposed deal.

poison pill

The poison pill makes the company less attractive to hostile buyers by increasing the price, and either prevents the takeover or creates economic consequences for the buyer.

preemptive right

The right of common stockholders to have the opportunity to purchase new shares of stock

board of directors

The role of the board of directors to hire the CEO or general manager of the business and assess the overall direction and strategy of the business. They represent shareholders.

hostile takeover

when an acquiring company attempts to take over a target company against the wishes of the target company's management.

Corporate charters

legal documents that the state issues to companies based on information the company provides in the articles of incorporation.

conglomerate merger

occurs when two or more companies in different industries or geographic locations come together to broaden their range of services and products.

Limited liability company

provides limited liability but is taxed like a partnership

incoporate

to join together

merger

two companies combine to form a new company.

Franchise

A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area

General Partnership

A general partner may invest money into the company. They also can be personally liable for the debts of the company.

Corporate Raiders

An individual or company that purchases stock in another company with the goal of an eventual takeover. It's liabilities are separate from it's owners.

cooperative

An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization

LLC (Limited Liability Company)

As with corporations, limited liability companies separate the owners' liability from that of the company. They can be taxed either as corporations or as partnerships, and they can be owned by many different types of business entities, such as trusts, corporations, individuals and other LLCs. LLCs do not put their shareholders' personal belongings at risk, separating the personal liabilities from the ones that the company generates. Also, as opposed to S corporations, there are fewer rules and regulations for the company to follow, which reduces the time and money spent with accountants and attorneys.

Unlimited Liability

the business owner is personally responsible for any loss the business makes.

Limited liability

the business owners' liability for debts is restricted to the amount they put into the business.